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California Public Utilities Commission Grants California Water Service's Request to Postpone Cost of Capital Application to May 1, 2026

1. CPUC postpones Cal Water's Cost of Capital applications by one year. 2. Current ROE of 10.27% and debt cost remains unaffected. 3. WCCM will adjust returns based on Moody's Utilities Bond Index. 4. Extension helps manage resource workload and reduces rate change frequency.

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FAQ

Why Bullish?

Maintained ROE provides stability amidst regulatory delays, similar to past extensions aiding utilities.

How important is it?

The extension and stable ROE may positively influence investor confidence in the short term.

Why Short Term?

Immediate impact due to extended ROE but less likely to affect long-term growth.

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January 15, 2025 08:45 ET  | Source: California Water Service Group SAN JOSE, Calif., Jan. 15, 2025 (GLOBE NEWSWIRE) -- (NYSE: CWT)—The California Public Utilities Commission (CPUC) has granted the request of California Water Service (Cal Water) and three other utilities to postpone their Cost of Capital applications from May 1, 2025 to May 1, 2026. The decision effectively maintains the current 10.27% return on equity (ROE) and 4.23% cost of debt for Cal Water, with a capital structure of 53.40% common equity and 46.60% long-term debt, and an authorized rate of return of 7.46%. The CPUC also reauthorized the Water Cost of Capital Mechanism (WCCM). Among other provisions, the WCCM automatically adjusts the rate of return when the Moody’s Utilities Bond Index fluctuates between Cost of Capital applications. The ROE will remain 10.27% through Dec. 31, 2026, unless the WCCM is triggered when next measured on Sept. 30, 2025. If a change in the ROE is required, it would become effective on Jan. 1, 2026. "We appreciate the CPUC's agreement to grant us an additional one-year extension on our Cost of Capital proceeding," said Martin A. Kropelnicki, Chairman and CEO. "There are several ongoing water utility rate cases currently before the CPUC, including our 2024 General Rate Case and Infrastructure Improvement Plan, that require the resources of staff, the utilities, and other parties to the proceeding. The extension will help manage this workload and also help reduce the frequency of rate changes for our customers.” About California Water Service GroupCalifornia Water Service Group is the parent company of regulated utilities California Water Service, Hawaii Water Service, New Mexico Water Service, and Washington Water Service, as well as Texas Water Service, a utility holding company. Together, these companies provide regulated and non-regulated water and wastewater service to more than 2.1 million people in California, Hawaii, New Mexico, Washington, and Texas. California Water Service Group’s common stock trades on the New York Stock Exchange under the symbol “CWT.” Additional information is available online at www.calwatergroup.com. This news release contains forward-looking statements within the meaning established by the Private Securities Litigation Reform Act of 1995 (PSLRA). The forward-looking statements are intended to qualify under provisions of the federal securities laws for "safe harbor" treatment established by the PSLRA. Forward-looking statements in this news release are based on currently available information, expectations, estimates, assumptions and projections, and our management's beliefs, assumptions, judgments and expectations about us, the water utility industry and general economic conditions. These statements are not statements of historical fact. When used in our documents, statements that are not historical in nature, including words like will, would, expects, intends, plans, believes, may, could, estimates, assumes, anticipates, projects, progress, predicts, hopes, targets, forecasts, should, seeks, commits, maintains or variations of these words or similar expressions are intended to identify forward-looking statements. Examples of forward-looking statements in this news release include, but are not limited to, statements describing Cal Water’s authorized return on equity, cost of debt, rate of return and capital structure. Forward-looking statements are not guarantees of future performance. They are based on numerous assumptions that we believe are reasonable but are subject to uncertainty and risks. Actual results may vary materially from what is contained in a forward-looking statement. Factors that may cause actual results to be different than those expected or anticipated include, but are not limited to: governmental and regulatory commissions' decisions; consequences of eminent domain actions relating to our water systems; changes in regulatory commissions' policies and procedures; the outcome and timeliness of regulatory commissions' actions concerning rate relief and other actions; changes in water quality standards; changes in environmental compliance and water quality requirements; electric power interruptions; the impact of opposition to rate increases; our ability to recover costs; availability of water supplies; issues with the implementation, maintenance or security of our information technology systems; civil disturbances or terrorist threats or acts; the adequacy of our efforts to mitigate physical and cyber security risks and threats; the ability of our enterprise risk management processes to identify or address risks adequately; changes in customer water use patterns and the effects of conservation; the impact of weather, climate change, natural disasters, and actual or threatened public health emergencies; the impact of market conditions and volatility on unrealized gains or losses on our operating results; risks associated with expanding our business and operations geographically; and other risks and unforeseen events described in our Securities and Exchange Commission (SEC) filings. In light of these risks, uncertainties and assumptions, investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news release. When considering forward-looking statements, you should keep in mind the cautionary statements included in this paragraph, as well as in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other reports filed from time-to-time with the SEC. We are not under any obligation, and we expressly disclaim any obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. Media ContactYvonne Kingmanykingman@calwater.com310-257-1434

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